Tasmanian shipping reform promises to create competitive industry

25 June, 2014

Tasmania's shipping services are set on a more competitive course with the release yesterday (24 June) of the Productivity Commission's Inquiry Report into Tasmanian Freight and Shipping commissioned by the Abbott government in December 2013.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss said the purpose of the inquiry was to investigate and review the high costs of transporting goods to Tasmania and the impact on shippers.

"The Australian government is firmly committed to supporting vital shipping services to boost productivity and put Tasmania's economy into high gear, and this report gives us something tangible to work with," Truss said.

"In addition to reviewing maritime arrangements, the report assesses Tasmania's economy, business and trade growth and how best to support tourism. Those are the considerations the government will now be examining.

"Keeping prices affordable for shippers and passengers, reforming maritime regulation and strengthening the maritime industry will help to put Tasmania on a more level playing field compared with mainland operators."

Ai Group Chief Executive Innes Willox welcomed the call for reform.

"The existing coastal shipping arrangements are far too costly and inflexible, both for users and suppliers of coastal shipping services. The current arrangements are having negative effects on industry and the whole community," Willox said.

"Australian companies need access to sea transportation at reasonable prices in order to remain competitive and productive. The use of sea transportation avoids congestion and higher maintenance costs on Australia's road and rail networks. It is of course vital for Tasmania as an island State.

"An appropriate balance needs to be struck which takes into account the interests of Australian companies (shipping companies as well as companies which use shipping), Australian workers (those employed by shipping companies and those employed by users of shipping) and Australian consumers who pay higher prices when transport costs are higher. The existing coastal shipping arrangements do not strike the right balance."

The government is considering the recommendations of the report and will provide a formal response following consultation with the Tasmanian government and the Joint Commonwealth and Tasmania Economic Council.